Dusting off the cobwebs from my micro-economics textbooks, this is a case of average cost (AC) versus marginal cost (MC). AC includes all costs, including development, while MC is the cost of extracting the next barrel. Once you have your fixed costs covered then you can afford to price on the basis of MC. If not then you will soon be bust (unless you are a government and can keep printing money).
Dusting off the cobwebs from my micro-economics textbooks, this...
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